A group of five not-for-profit aged care providers in regional NSW say cuts to aged care funding will reduce their collective revenue by $3 million in the first year and mean the loss of 100 part-time jobs in their area.

The five organisations in the Illawarra said they anticipated most of the lost jobs would be in carer, activity officer and physiotherapy roles. The providers are Warrigal, Harbison Care, Bluehaven Care, Illawarra Diggers and Marco Polo.

Mark Sewell, CEO of Warrigal, said the changes to ACFI would result in a $900,000 reduction in his organisation’s revenue during the first year, increasing to $4 million in later years.

“All of that comes from the frontline and we anticipate it will affect primarily pain management and our physiotherapy programs,” Mr Sewell told Australian Ageing Agenda.

Re-thinking building plans

Beyond job losses, Mr Sewell said the controversial funding changes would “put a pause” on many aged care providers’ plans to build new facilities, pending revised cost modelling.

“There’s a lot of pressure on supply at the high end of residential care, and this is going to slow significantly the build of aged care beds,” Mr Sewell said.

Many providers would put new build projects on hold for six months to re-think their financial viability and see how the ACFI changes play out, he added.

Impact on poorest residents

Aged care providers may charge fees to some of their residents for the therapies no longer funded through ACFI, which could replace some of the lost revenue. However, this wasn’t an option for many not-for-profit organisations with high numbers of disadvantaged residents, he said.

For that reason, he said it was “very likely” that the poorest residents with complex healthcare needs would end up in the hospital system, as Amana Living told AAA last week.

Mr Sewell welcomed last week’s call by Senator Nick Xenophon for a senate inquiry into the funding cuts. He said providers were calling for a halt to the funding changes and a full review of the cost of care, and a five-year funding commitment by government.

Want to have your say on this story? Comment below. Send us your news and tip-offs to editorial@australianageingagenda.com.au 

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  1. As with everything there are two sides to every story. We are also a small non-profit provider and hear from reputable allied health providers that many unscrupulous providers “milk” the funding tool by, for example gathering large groups of residents in a circle attached to TENS machines, and claim the higher ACFI rate by stating the residents received the appropriate amount physio intervention. Clearly this practice is dodgy, as residents do not receive the “individual intervention” required to claim the higher rate.

    Indeed though, the govt is cutting our noses off to spite their faces, and if they looked closely at the costs per bed of a hospital vs current Aged Care bed funding, they would see that they could easily divert huge funding amounts to allow Aged Care providers to fill their beds, and build more, while at the same time reducing by an even larger amount funding to hospitals, who wouldn’t be under so much pressure if they didn’t need to keep older aussies in hospital for so long (our local hospital are sometimes keeping older Aussies in for many weeks unnecessarily!!

    The only good thing to come out of this though is that the industry is shouting out loud, instead of grinning and bearing it

  2. What no-one else has mentioned is that when a client of the National Disability Insurance Scheme (NDIS) reaches the age of 65 they transfer into the aged care support scheme. The NDIS funding is “guaranteed” but then what? A senior with exceptional needs has a need for extra funding.

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